Who is responsible for the fees and expenses of the arbitration proceeding for Chatime?

According to Chatime's 2025 Franchise Disclosure Document, the responsibility for fees and expenses in an arbitration proceeding depends on the arbitrator's decision. The arbitrator has the authority to award these fees and expenses to the prevailing party. This means that if Chatime wins the arbitration, the franchisee may be responsible for covering Chatime's legal costs and other associated expenses. Conversely, if the franchisee prevails, Chatime may have to cover those costs.

However, if the arbitrator does not award the fees and expenses to the prevailing party, then each party is responsible for their own fees, costs, and expenses. In this scenario, the charges for the arbitration service and the arbitrator will be split between Chatime and the franchisee. This arrangement is fairly standard in franchise agreements, as it ensures both parties have a financial stake in the arbitration process.

Prospective Chatime franchisees should be aware of these potential costs when considering entering into a franchise agreement. It is important to factor in the possibility of incurring significant legal and arbitration expenses, regardless of the outcome of any dispute. Understanding these financial implications can help franchisees make informed decisions and plan accordingly.